What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-04-28 compared with 2021-10-28 · 165 added, 196 removed, 439 unchanged (45% of the section changed)

7 unchanged sentences

Assets of consolidated T.

Rowe Price investment products ($ 1,837.1 million at September 30, 2021 and $ 2,497.4 million at December 31, 2020, related to variable interest entities)

Rowe Price investment products ($ 1,501.0 million at March 31, 2022 and $ 1,761.5 million at December 31, 2021, related to variable interest entities)

1,658.2 1,962.8

Operating lease assets 164.5 201.2

Property and equipment, net 719.1 695.4

Property, equipment and software, net 736.3 736.2

Intangible assets, net 886.3 913.4

Goodwill 2,643.9 2,693.2

3 unchanged sentences

Liabilities of consolidated T.

Rowe Price investment products ($ 62.3 million at September 30, 2021 and $ 47.7 million at December 31, 2020, related to variable interest entities)

Rowe Price investment products ($ 44.2 million at March 31, 2022 and $ 36.2 million at December 31, 2021, related to variable interest entities)

Operating lease liabilities 211.8 249.2

Accrued compensation and related costs 293.6 256.8

Income taxes payable 60.7 85.0

Supplemental savings plan liability 826.3 882.6

Contingent consideration liability 211.5 306.3

Income taxes payable 214.6 77.9

Total liabilities 2,231.0 2,255.3

4 unchanged sentences

Common stock, $ .20 par value—authorized 750,000,000 ;

issued 226,217,000 shares at September 30, 2021 and 227,965,000 at December 31, 2020

issued 227,283,000 shares at March 31, 2022 and 229,175,000 at December 31, 2021

Additional capital in excess of par value 668.2 919.8

1 unchanged sentence

Accumulated other comprehensive loss ( 31.5 ) ( 26.5 )

Total stockholders’ equity attributable to T.

Rowe Price Group, Inc.

9,054.4 9,022.7

Non-controlling interests in consolidated entities 272.2 248.7

Total permanent stockholders’ equity 9,326.6 9,271.4

3 unchanged sentences

(in millions, except per-share amounts)

Three months ended Nine months ended

Three months ended

3/31/2022 3/31/2021

Investment advisory fees $ 1,662.1 $ 1,687.8

Capital allocation-based income 44.4 —

Administrative, distribution, and servicing fees 156.5 139.0

10 unchanged sentences

Non-operating income (loss)

Net gains on investments 8.7 84.6 165.0 100.6

Net gains (losses) on investments ( 89.9 ) 68.6

Net gains (losses) on consolidated investment products ( 101.4 ) 37.2

Other income (loss) ( 7.2 ) ( 3.7 )

Total non-operating income ( 11.5 ) 191.6 234.5 106.4

Total non-operating income (loss) ( 198.5 ) 102.1

Income before income taxes 678.9 995.3

4 unchanged sentences

Net income attributable to T.

Rowe Price $ 777.2 $ 643.2 $ 2,342.3 $ 1,589.3

Rowe Price Group $ 567.9 $ 749.4

Earnings per share on common stock of T.

Rowe Price Group

Basic $ 2.43 $ 3.20

3 unchanged sentences

(in millions)

Three months ended Nine months ended

Three months ended

3/31/2022 3/31/2021

10 unchanged sentences

Equity method investments

3.5 .1 2.4 ( 9.4 )

Other comprehensive income (loss) before income taxes ( 16.6 ) ( 22.3 )

4 unchanged sentences

Total comprehensive income attributable to T.

Rowe Price $ 776.5 $ 652.7 $ 2,335.9 $ 1,589.6

Rowe Price Group $ 562.9 $ 741.9

The accompanying notes are an integral part of these statements.

1 unchanged sentence

(in millions)

Nine months ended

Three months ended

3/31/2022 3/31/2021

2 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization of property and equipment

Depreciation and amortization of property, equipment and software 54.5 49.0

Amortization of acquisition-related assets and retention arrangements 53.9 —

Fair value remeasurement of contingent consideration liability ( 45.5 ) —

Stock-based compensation expense

Net gains recognized on investments ( 144.4 ) ( 75.3 )

Net (investments) redemptions in T.

Net (gains) losses recognized on investments 38.3 ( 59.5 )

Net redemptions in T.

Rowe Price investment products used to economically hedge supplemental savings plan liability 6.1 22.0

2 unchanged sentences

180.1 ( 120.9 )

Other changes in assets and liabilities

Other changes 238.0 281.8

Net cash provided by operating activities 1,103.4 994.7

Cash flows from investing activities

Purchases of T.

Rowe Price investment products ( 47.3 ) ( 240.3 )

Dispositions of T.

Rowe Price investment products 285.4 381.9

Purchases of investment products ( 6.0 ) ( 12.5 )

Dispositions of investment products 64.9 60.3

Net cash of T.

Rowe Price investment products on deconsolidation ( 5.9 ) ( 27.3 )

Additions to property and equipment ( 178.7 ) ( 155.4 )

Additions to property, equipment and software ( 54.9 ) ( 58.8 )

Other investing activity 5.7 7.5

5 unchanged sentences

Rowe Price ( 279.2 ) ( 252.3 )

Net subscriptions received from redeemable non-controlling interest holders 22.7 298.7

Net contributions from non-controlling interests in consolidated entities 6.0 —

Net subscriptions (redemptions) received from redeemable non-controlling interest holders ( 55.9 ) 183.1

Net cash used in financing activities ( 644.1 ) ( 307.5 )

5 unchanged sentences

1,624.2 2,256.5

Cash and cash equivalents at end of period, including $ 91.6 million at September 30, 2021, and $ 78.0 million at September 30, 2020, held by consolidated T.

Cash and cash equivalents at end of period, including $ 87.1 million at March 31, 2022, and $ 83.7 million at March 31, 2021, held by consolidated T.

Rowe Price investment products

6 unchanged sentences

stockholders’

Redeemable non-controlling interests

Balances at June 30, 2021 226,925 $ 45.4 $ 673.7 $ 7,202.6 $ ( 28.7 ) $ 7,893.0 $ 880.4

Net income — — — 777.2 — 777.2 ( 19.8 )

Other comprehensive income (loss), net of tax — — — — ( .7 ) ( .7 ) ( 12.2 )

Dividends declared ($ 1.08 per share)

— — — ( 250.7 ) — ( 250.7 ) —

Shares issued upon option exercises 321 — 9.0 — — 9.0 —

Net shares issued upon vesting of restricted stock units 5 — ( .5 ) — — ( .5 ) —

Stock-based compensation expense — — 52.3 — — 52.3 —

Restricted stock units issued as dividend equivalents — — .4 ( .2 ) — .2 —

Common shares repurchased ( 1,034 ) ( .2 ) ( 80.3 ) ( 137.2 ) — ( 217.7 ) —

Net redemptions from T.

Rowe Price investment products — — — — — — ( 292.8 )

Net consolidations of T.

Rowe Price investment products — — — — — — 531.0

Balances at September 30, 2021 226,217 $ 45.2 $ 654.6 $ 7,591.7 $ ( 29.4 ) $ 8,262.1 $ 1,086.6

Three months ended 9/30/2020

outstanding Common

stock Additional

par value Retained

earnings AOCI (1)

stockholders’

equity Redeemable non-controlling interests

Balances at June 30, 2020 226,990 $ 45.4 $ 654.6 $ 6,102.9 $ ( 52.2 ) $ 6,750.7 $ 1,090.1

Net income — — — 643.2 — 643.2 55.4

Other comprehensive income (loss), net of tax — — — — 9.5 9.5 20.8

Dividends declared ($ 0.90 per share)

— — — ( 210.2 ) — ( 210.2 ) —

Shares issued upon option exercises 492 .1 25.9 — — 26.0 —

Net shares issued upon vesting of restricted stock units 17 — ( 1.6 ) — — ( 1.6 ) —

Stock-based compensation expense — — 52.8 — — 52.8 —

Restricted stock units issued as dividend equivalents — — .1 ( .1 ) — — —

Common shares repurchased ( 1,124 ) ( .2 ) ( 77.2 ) ( 64.5 ) — ( 141.9 ) —

Net subscriptions into T.

Rowe Price investment products — — — — — — 217.9

Net deconsolidations of T.

Rowe Price investment products — — — — — — ( 44.0 )

Balances at September 30, 2020 226,375 $ 45.3 $ 654.6 $ 6,471.3 $ ( 42.7 ) $ 7,128.5 $ 1,340.2

(1) Accumulated other comprehensive income.

The accompanying notes are an integral part of these statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(shares in thousands;

dollars in millions)

Nine months ended 9/30/2021

outstanding Common

stock Additional

par value Retained

earnings AOCI (1)

stockholders’

equity Redeemable non-controlling interests

equity attributable to T.

Rowe Price Group, Inc.

Non-controlling interests in consolidated entities Total permanent stockholders’ equity Redeemable non-controlling interests

Balances at December 31, 2021 229,175 $ 45.8 $ 919.8 $ 8,083.6 $ ( 26.5 ) $ 9,022.7 $ 248.7 $ 9,271.4 $ 982.3

Net income — — — 2,342.3 — 2,342.3 22.6

Net income (loss) — — — 567.9 — 567.9 17.5 585.4 ( 53.5 )

Other comprehensive income (loss), net of tax — — — — ( 5.0 ) ( 5.0 ) — ( 5.0 ) ( 9.9 )

1 unchanged sentence

— — — ( 279.2 ) — ( 279.2 ) — ( 279.2 ) —

Special cash dividend declared ($ 3.00 per share)

— — — ( 699.5 ) — ( 699.5 ) —

Shares issued upon option exercises 174 — 7.8 — — 7.8 — 7.8 —

Restricted shares issued, net of shares withheld for taxes 4 — — — — — —

Net shares issued upon vesting of restricted stock units 41 ( 3.2 ) — — ( 3.2 ) — ( 3.2 ) —

2 unchanged sentences

Common shares repurchased ( 2,107 ) ( .3 ) ( 319.8 ) — — ( 320.1 ) — ( 320.1 ) —

Net subscriptions into T.

Net contributions from non-controlling interests in consolidated entities — — — — — — 6.0 6.0 —

Net redemptions from T.

Rowe Price investment products — — — — — — — — ( 65.6 )

1 unchanged sentence

Rowe Price investment products — — — — — — — — ( 62.9 )

Balances at September 30, 2021 226,217 $ 45.2 $ 654.6 $ 7,591.7 $ ( 29.4 ) $ 8,262.1 $ 1,086.6

Nine months ended 9/30/2020

Balances at March 31, 2022 227,283 $ 45.5 $ 668.2 $ 8,372.2 $ ( 31.5 ) $ 9,054.4 $ 272.2 $ 9,326.6 $ 790.4

Three months ended 3/31/2021

outstanding Common

2 unchanged sentences

earnings AOCI (1)

Total permanent

stockholders’

6 unchanged sentences

Shares issued upon option exercises 572 .1 25.3 — — 25.4 —

Restricted shares issued, net of shares withheld for taxes 8 — — — — — —

Net shares issued upon vesting of restricted stock units 41 — ( 3.7 ) — — ( 3.7 ) —

Forfeiture of restricted awards — — — — — — —

Stock-based compensation expense — — 57.5 — — 57.5 —

5 unchanged sentences

Rowe Price investment products — — — — — — ( 739.9 )

Balances at September 30, 2020 226,375 $ 45.3 $ 654.6 $ 6,471.3 $ ( 42.7 ) $ 7,128.5 $ 1,340.2

Balances at March 31, 2021 226,948 $ 45.4 $ 654.6 $ 7,338.7 $ ( 30.5 ) $ 8,008.2 $ 1,012.9

(1) Accumulated other comprehensive income

7 unchanged sentences

mutual funds”), subadvised funds, separately managed accounts, collective investment trusts, and other

Rowe Price products.

Rowe Price products include open-ended investment products offered to investors outside the U.S., and products offered through variable annuity life insurance plans in the U.S.

affiliated products.

The other affiliated products include:

open-ended investment products offered to investors outside the U.S., products offered through variable annuity life insurance plans in the U.S., affiliated private investment funds or private accounts, and collateralized loan obligations.

We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services;

1 unchanged sentence

trust services;

and non-discretionary advisory services through model delivery and other multi-asset solutions for providers to implement.

and non-discretionary advisory services through model delivery.

Additionally, we also derive revenue from our interests in general partners of certain affiliated private investment funds that are entitled to a disproportionate allocation of income through capital allocation-based arrangements.

Investment advisory revenues depend largely on the total value and composition of assets under our management.

Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations.

On December 29, 2021, we completed our acquisition of Oak Hill Advisors, L.P., a leading alternative credit manager, and other entities that had common ownership (collectively, OHA).

We acquired 100 % of the equity interests of Oak Hill Advisors, L.P., 100 % of the equity interests in entities that make co-investments in certain affiliated private investment funds (the "co-investment entities") and a majority of the equity interests in entities that have interests in general partners of affiliated private investment funds and are entitled to a disproportionate allocation of income (the "carried interest entities").

As of March 31, 2022, OHA had $ 57 billion of capital under management (which includes net assets value, portfolio value and/or unfunded capital).

We have reflected the financial position, operating results and cash flows of OHA in these financial statements.

BASIS OF PRESENTATION.

16 unchanged sentences

Distribution and servicing fees

Investment advisory fees

Administrative fees

Distribution and servicing fees

mutual funds $ 1,125.5 $ 82.6 $ 30.9 $ 1,239.0 $ 939.5 $ 72.4 $ 28.5 $ 1,040.4

Subadvised funds, separate accounts, collective investment trusts, and other investment products 687.9 — — 687.9 529.8 — — 529.8

Other clients (1)

— 27.2 — 27.2 — 25.6 — 25.6

$ 1,813.4 $ 109.8 $ 30.9 $ 1,954.1 $ 1,469.3 $ 98.0 $ 28.5 $ 1,595.8

Nine months ended 9/30/2021 Nine months ended 9/30/2020

Administrative, distribution, and servicing fees

(in millions)

Investment advisory fees

Administrative fees

Distribution and servicing fees

Capital allocation-based income Net revenues

Investment advisory fees

7 unchanged sentences

(1) Other clients primarily include individuals, defined contribution plans, college savings plans, and institutions related to our non-discretionary advisory services.

Total net revenues earned from our related parties, specifically T.

Rowe Price investment products, aggregate $ 1,599.5 million and $ 1,302.3 million for the three months ended September 30, 2021 and 2020, respectively.

Total net revenues earned from these products during the nine months ended September 30, 2021 and 2020 aggregate $ 4,653.7 million and $ 3,652.8 million, respectively.

Accounts receivable from these products aggregate to $ 581.6 million at September 30, 2021 and $ 523.4 million at December 31, 2020.

Total net revenues earned from our related parties aggregate $ 1,536.4 million and $ 1,482.3 million for the three months ended March 31, 2022 and 2021, respectively.

Accounts receivable from these products aggregate to $ 584.5 million at March 31, 2022 and $ 577.9 million at December 31, 2021.

The following table details the investment advisory revenues earned from clients by their underlying asset class.

Three months ended Nine months ended

Three months ended

(in millions) 3/31/2022 3/31/2021

7 unchanged sentences

Multi-asset 184.0 175.9

687.9 529.8 2,015.2 1,452.1

Alternatives 64.9 —

Total $ 1,662.1 $ 1,687.8

1 unchanged sentence

Average during

Three months ended Nine months ended As of

Three months ended As of

(in billions) 3/31/2022 3/31/2021 3/31/2022 12/31/2021

7 unchanged sentences

Multi-asset 233.4 195.2 239.9 245.5

Alternatives 41.9 — 42.2 41.7

761.9 694.3 762.4 816.4

2 unchanged sentences

investment advisory clients outside the U.S.

account for 8.8 %, 9.0 % and 9.3 % of our assets under management at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.

account for 9.7 % and 9.9 % of our assets under management at March 31, 2022 and December 31, 2021, respectively.

NOTE 3 – INVESTMENTS.

8 unchanged sentences

Investment partnerships and other investments 105.0 108.9

Investments in affiliated collateralized loan obligations 9.3 10.8

Equity method investments

Rowe Price investment products

Discretionary investments 254.1 242.9

Seed capital 164.9 178.6

Rowe Price investment products - seed capital 134.0 141.7

Investments in affiliated private investment funds - carried interest 642.1 609.8

Investments in affiliated private investment funds - seed/co-investment 153.1 151.3

23 % Investment in UTI Asset Management Company Limited (India)

Investment partnerships and other investments 2.8 2.4

Other investment partnerships and investments 2.5 2.5

Held to maturity

Investments in affiliated collateralized loan obligations 115.2 119.1

Treasury note 1.0 1.0

4 unchanged sentences

The investment strategies of these partnerships include growth equity, buyout, venture capital, and real estate.

During the three months ended September 30, 2021, net losses on investments included $ 4.6 million of net unrealized losses related to investments held at fair value that were still held at September 30, 2021.

During the nine months ended September 30, 2021, net gains on investments included $ 83.7 million of net unrealized gains

related to investments held at fair value that were still held at September 30, 2021.

For the three and nine months ended September 30, 2020, net gains on investments included $ 75.5 million and $ 53.6 million, respectively, of net unrealized gains related to investments held at fair value that were still held at September 30, 2020.

During the nine months ended September 30, 2021 and 2020, certain T.

During the three months ended March 31, 2022, net losses on investments included $ 99.9 million of net unrealized losses related to investments held at fair value that were still held at March 31, 2022.

For the same period of 2021, net gains on investments included $ 38.8 million of net unrealized gains related to investments held at fair value that were still held at March 31, 2021.

During the three months ended March 31, 2022 and 2021, certain T.

Rowe Price investment products in which we provided initial seed capital at the time of formation were deconsolidated, as we no longer had a controlling interest.

1 unchanged sentence

Rowe Price investment products as either an equity method investment or an investment held at fair value.

Additionally, during the nine months ended September 30, 2021 and September 30, 2020, certain T.

Additionally, during the three months ended March 31, 2022 and March 31, 2021, certain T.

Rowe Price investment products were consolidated, as we regained a controlling interest.

The net impact of these changes on our unaudited condensed consolidated balance sheets and statements of income as of the dates the portfolios were deconsolidated or reconsolidated is detailed below.

Three months ended Nine months ended

Three months ended

(in millions) 3/31/2022 3/31/2021

5 unchanged sentences

Gains recognized upon deconsolidation $ 1.6 $ 2.6

The gains or losses recognized upon deconsolidation were the result of reclassifying currency translation adjustments accumulated on certain T.

The gains recognized upon deconsolidation were the result of reclassifying currency translation adjustments accumulated on certain T.

Rowe Price investment products with non-USD functional currencies from accumulated other comprehensive income to non-operating income.

INVESTMENTS IN AFFILIATED COLLATERALIZED LOAN OBLIGATIONS.

There is debt associated with our long-term investments in affiliated collateralized loan obligations (“CLOs”).

As of March 31, 2022 and December 31, 2021, the debt is valued at $ 108.7 million and $ 113.5 million, and is reported in accounts payable and accrued expenses in our unaudited condensed consolidated balance sheets.

The debt includes outstanding repurchase agreements of € 66.7 million (equivalent to $ 73.8 million at March 31, 2022 and $ 75.9 million at December 31, 2021 at the respective EUR spot rates) and collateralized by the CLO investments.

The debt also includes outstanding note facilities of € 32.4 million (equivalent to $ 34.9 million at March 31, 2022 and $ 36.9 million at December 31, 2021 at the respective EUR spot rates) and are collateralized by first priority security interests in the assets of the consolidated OHA entity that is party to the notes.

The debt bears interest at rates based on EURIBOR plus the initial margin, which equals all-in rates ranging from 1.70 % to 1.95 % as of March 31, 2022.

The debt matures on various dates through 2032 or if the investments are paid back in full or cancelled.

VARIABLE INTEREST ENTITIES.

Our investments at September 30, 2021 and December 31, 2020, include interests in variable interest entities that we do not consolidate as we are not deemed the primary beneficiary.

Our investments at March 31, 2022 and December 31, 2021 include interests in variable interest entities that we do not consolidate as we are not deemed the primary beneficiary.

Our maximum risk of loss related to our involvement with these entities is as follows:

4 unchanged sentences

$ 1,156.5 $ 1,182.6

The unfunded capital commitments totaling $ 9.2 million at September 30, 2021 and $ 12.3 million at December 31, 2020 relate primarily to the investment partnerships in which we have an existing investment.

The unfunded capital commitments totaling $ 110.4 million at March 31, 2022 and $ 94.2 million at December 31, 2021 relate primarily to the affiliated private investment funds and the investment partnerships in which we have an existing investment.

In addition to such amounts, a percentage of prior distributions may be called under certain circumstances.

INVESTMENTS IN AFFILIATED PARTNERS.

During 2021, as part of the OHA acquisition, we acquired a majority of the equity interests in entities that have interests in general partners of affiliated private investment funds and are entitled to a disproportionate allocation of income.

These entities are considered variable interest entities and are consolidated as T.

Rowe Price was determined to be the primary beneficiary.

The total assets, liabilities and non-controlling interests of these consolidated variable interest entities are as follows:

(in millions) 3/31/2022 12/31/2021

Assets $ 695.4 $ 692.7

Liabilities $ 1.1 $ 56.4

Non-controlling interest $ 272.2 $ 248.7

NOTE 4 – FAIR VALUE MEASUREMENTS.

6 unchanged sentences

Level 3 – unobservable inputs reflecting our own assumptions based on the best information available.

value any investments using Level 3 inputs.

The inputs into the determination of fair value require significant management judgment or estimation.

Investments in this category generally include investments for which there is not an actively-traded market.

These levels are not necessarily an indication of the risk or liquidity associated with our investments.

The following table summarizes our investments that are recognized in our unaudited condensed consolidated balance sheets

using fair value measurements determined based on the differing levels of inputs.

The following table summarizes our investments and liability that are recognized in our unaudited condensed consolidated balance sheets using fair value measurements determined based on the differing levels of inputs.

This table excludes investments held by the consolidated T.

2 unchanged sentences

(in millions) Level 1

Level 3 Level 1

Rowe Price investment products

4 unchanged sentences

Other investments 1.3 .1 — .7 .1 —

Investments in affiliated collateralized loan obligations — 9.3 — — 10.8 —

Total $ 3,077.5 $ 31.1 $ — $ 2,826.2 $ 34.3 $ —

Contingent consideration liability $ — $ — $ 211.5 $ — $ — $ 306.3

The fair value hierarchy level table above does not include the investment partnerships and other investments for which fair value is estimated using their NAV per share as a practical expedient.

The carrying value of these investments as disclosed in Note 3 were $ 107.8 million at September 30, 2021, and $ 94.0 million at December 31, 2020.

The carrying value of these investments as disclosed in Note 3 were $ 103.6 million at March 31, 2022, and $ 108.1 million at December 31, 2021.

As part of the purchase consideration for our acquisition of OHA in December 2021, there was contingent consideration in the amount of up to $ 900.0 million, payable in cash, that may be due as part of an earnout payment starting in 2025 and ending in 2027 upon satisfying or exceeding certain defined revenue targets.

These defined revenue targets will be evaluated on a cumulative basis beginning at the end of 2024, with the ability to extend two additional years if the defined revenue targets are not achieved.

About 22 % of the earnout is conditioned upon continued service with T.

Rowe Price and was excluded from the purchase consideration and deemed compensatory.

The fair value of the earnout is remeasured each reporting period and recognized over the related service period.

For the three months ended March 31, 2022, $ 5.1 million was recorded as part of compensation expense in our unaudited condensed consolidated statements of income for the portion of the earnout deemed compensatory.

The change in the contingent consideration liability measured at fair value for which we used Level 3 inputs to determine fair value is as follows:

Contingent Consideration Liability

(in millions) Three Months Ended 3/31/2022

Balance, 12/31/2021 $ 306.3

Measurement period adjustment ( 49.3 )

Unrealized (gains) losses, included in earnings ( 45.5 )

Balance, 3/31/2022 $ 211.5

The fair value of the contingent consideration is measured using the Monte Carlo simulation methodology of valuation.

The most significant assumptions used relate to the discount periods and rates and from changes pertaining to the achievement of the defined financial targets.

The unrealized (gains) losses during the quarter are reflected in general, administrative and other expenses in our unaudited condensed consolidated statements of income.

In addition, simultaneously with the OHA acquisition, a Value Creation Agreement was entered into whereby certain employees of OHA will receive incentive payments in the aggregate equal to 10 % of the appreciated value of the OHA business, subject to an annualized preferred return to T.

Rowe Price, on the fifth anniversary of the acquisition date.

This arrangement is treated as a post-combination compensation expense.

This arrangement will be remeasured at fair value at each reporting date and recognized over the related service period.

As of March 31, 2022, $ 2.0 million was recognized as part of compensation expense in our unaudited condensed consolidated statements of income.

NOTE 5 – CONSOLIDATED T.

ROWE PRICE INVESTMENT PRODUCTS.

ROWE PRICE INVESTMENT PRODUCTS AND OTHER ENTITIES.

Rowe Price investment products that we consolidate in our unaudited condensed consolidated financial statements are generally those products we provided initial seed capital at the time of their formation and have a controlling interest.

21 unchanged sentences

$ 145.5 $ 1,456.8 $ 1,602.3 $ 186.0 $ 1,725.3 $ 1,911.3

(1) Cash and cash equivalents includes $ 6.0 million at September 30, 2021, and $ 7.0 million at December 31, 2020, of T.

(1) Cash and cash equivalents includes $ 6.6 million at March 31, 2022, and $ 6.5 million at December 31, 2021, of T.

Rowe Price money market mutual funds.

(2) Investments include $ 44.5 million at September 30, 2021, and $ 26.9 million at December 31, 2020 of other T.

(2) Investments include $ 39.3 million at March 31, 2022, and $ 42.5 million at December 31, 2021 of other T.

Rowe Price investment products.

4 unchanged sentences

Rowe Price investment products is limited to valuation changes associated with our net interest.

We, however, are required to recognize the valuation changes associated with all underlying

investments held by these products in our unaudited condensed consolidated statements of income and disclose the portion attributable to third party investors as net income attributable to redeemable non-controlling interests.

We, however, are required to recognize the valuation changes associated with all underlying investments held by these products in our unaudited condensed consolidated statements of income and disclose the portion attributable to third party investors as net income attributable to redeemable non-controlling interests.

The operating results of the consolidated T.

Rowe Price investment products for the three- and nine-months ended September 30, 2021 and 2020, are reflected in our unaudited condensed consolidated statements of income as follows:

Rowe Price investment products for the three months ended March 31, 2022 and 2021, are reflected in our unaudited condensed consolidated statements of income as follows:

Three months ended

9 unchanged sentences

$ ( 6.8 ) $ ( 97.1 ) $ ( 103.9 ) $ 5.9 $ 27.8 $ 33.7

Nine months ended

9/30/2021 9/30/2020

(in millions) Voting

interest entities Variable interest entities Total Voting

interest entities Variable interest entities Total

Operating expenses reflected in net operating income $ ( .4 ) $ ( 8.7 ) $ ( 9.1 ) $ ( 1.2 ) $ ( 10.5 ) $ ( 11.7 )

Net investment income (loss) reflected in non-operating income 14.1 61.5 75.6 ( 5.7 ) 19.0 13.3

Impact on income before taxes $ 13.7 $ 52.8 $ 66.5 $ ( 6.9 ) $ 8.5 $ 1.6

Net income (loss) attributable to T.

Rowe Price $ 8.8 $ 35.1 $ 43.9 $ ( 2.7 ) $ ( .1 ) $ ( 2.8 )

Net income (loss) attributable to redeemable non-controlling interests 4.9 17.7 22.6 ( 4.2 ) 8.6 4.4

$ 13.7 $ 52.8 $ 66.5 $ ( 6.9 ) $ 8.5 $ 1.6

The operating expenses of the consolidated investment products are reflected in general, administrative and other expenses.

In preparing our unaudited condensed consolidated financial statements, we eliminated operating expenses of $ 1.6 million and $ 2.7 million for the three months ended September 30, 2021 and 2020, respectively, against the investment advisory and administrative fees earned from these products.

Operating expenses eliminated for the nine months ended September 30, 2021 and 2020, were $ 4.0 million and $ 7.3 million, respectively.

The net investment income (loss) reflected in non-operating income (loss) includes dividend and interest income as well as realized and unrealized gains and losses on the underlying securities held by the consolidated T.

In preparing our unaudited condensed consolidated financial statements, we eliminated operating expenses of $ 0.9 million and $ 1.3 million for the three months ended March 31, 2022 and 2021, respectively, against the investment advisory and administrative fees earned from these products.

The net investment income (loss) reflected in non-operating income (loss) includes dividend and interest income as well as realized and

unrealized gains and losses on the underlying securities held by the consolidated T.

Rowe Price investment products.

The table below details the impact of these consolidated investment products on the individual lines of our unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020.

Nine months ended

The table below details the impact of these consolidated investment products on the individual lines of our unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021.

Three months ended

3/31/2022 3/31/2021

16 unchanged sentences

$ 9.6 $ 77.5 $ 87.1 $ 3.0 $ 80.7 $ 83.7

The net cash provided by financing activities during the nine months ended September 30, 2021 and 2020 includes $ 35.3 million and $ 95.2 million, respectively, of net subscriptions we made into the consolidated T.

The net cash provided by financing activities during the three months ended March 31, 2022 and 2021 includes $ 35.1 million and $ 34.1 million, respectively, of net subscriptions we made into the consolidated T.

Rowe Price investment products, net of dividends received.

19 unchanged sentences

Liabilities $ ( 1.9 ) $ ( 13.1 ) $ ( .7 ) $ ( 9.7 )

NOTE 6 – STOCKHOLDERS’ EQUITY.

Accounts payable and accrued expenses includes liabilities of $ 36.0 million at September 30, 2021, and $ 2.5 million at December 31, 2020 for common stock repurchases that settled during the first week of October 2021 and January 2021, respectively.

On June 14, 2021, the Board of Directors declared a special cash dividend of $ 3.00 per common share, or $ 699.8 million, that was paid on July 7, 2021 to stockholders of record as of the close of business on June 25, 2021.

NOTE 6 - GOODWILL AND INTANGIBLE ASSETS.

Goodwill and intangible assets consist of the following:

(in millions) 3/31/2022 12/31/2021

Goodwill $ 2,643.9 $ 2,693.2

Indefinite-lived intangible assets - trade name 134.7 134.7

Indefinite-lived intangible assets - investment advisory agreements 164.8 164.8

Definite-lived intangible assets - investment advisory agreements 586.8 613.9

Total $ 3,530.2 $ 3,606.6

Estimated amortization expense for the definite-lived investment advisory agreements intangible assets for the remainder of 2022 is $ 81.4 million, $ 108.1 million for 2023, $ 105.7 million for 2024, $ 105.0 million for 2025, and $ 87.7 million for 2026.

Amortization expense for the definite-lived investment advisory agreements intangible assets was $ 27.1 million for the three months ended March 31, 2022.

Goodwill activity during the three months ended March 31, 2022 was as follows:

(in millions) 2022

Balance, 12/31/2021 $ 2,693.2

Measurement period adjustment ( 49.3 )

Balance, 3/31/2022 $ 2,643.9

We evaluate the carrying amount of goodwill for possible impairment on an annual basis in the third quarter using a fair value approach or if triggering events occur that require us to evaluate for impairment earlier.

NOTE 7 – STOCK-BASED COMPENSATION.

STOCK OPTIONS.

The following table summarizes the status of, and changes in, our stock options during the nine months ended September 30, 2021.

The following table summarizes the status of, and changes in, our stock options during the three months ended March 31, 2022.

Options Weighted-

1 unchanged sentence

Exercised ( 214,772 ) $ 64.58

Outstanding at September 30, 2021 2,975,667 $ 72.83

Exercisable at September 30, 2021 2,975,667 $ 72.83

EFFECT OF SPECIAL CASH DIVIDEND.

As a result of the special cash dividend declared by the Board of Directors in June 2021, the anti-dilution provisions of our employee long-term incentive plans and non-employee director plans (collectively, the LTI plans) require an automatic adjustment to neutralize the effect of the special cash dividend.

On the special cash dividend’s ex-dividend date (June 24, 2021), the number of shares authorized and the number of stock options outstanding and their exercise price were adjusted resulting in an increase of 50,607 stock options outstanding on the ex-dividend date, and no incremental compensation expense.

In the table above, the number of options outstanding at December 31, 2020 was updated to reflect this adjustment.

Outstanding at March 31, 2022 2,631,807 $ 73.55

Exercisable at March 31, 2022 2,631,807 $ 73.55

RESTRICTED SHARES AND STOCK UNITS.

The following table summarizes the status of, and changes in, our nonvested restricted shares and restricted stock units during the nine months ended September 30, 2021.

The following table summarizes the status of, and changes in, our nonvested restricted shares and restricted stock units during the three months ended March 31, 2022.

Weighted-average

4 unchanged sentences

Forfeited — ( 61,216 ) $ 141.91

Nonvested at September 30, 2021 4,336 6,162,870 $ 117.21

Nonvested at September 30, 2021, includes performance-based restricted stock units of 335,162 .

Nonvested at March 31, 2022 5,720 5,587,135 $ 147.50

Nonvested at March 31, 2022, includes performance-based restricted stock units of 294,518 .

These nonvested performance-based restricted stock units include 81,123 units for which the performance period has lapsed, and the performance threshold has been met.

FUTURE STOCK-BASED COMPENSATION EXPENSE.

The following table presents the compensation expense to be recognized over the remaining vesting periods of the stock-based awards outstanding at September 30, 2021.

The following table presents the compensation expense to be recognized over the remaining vesting periods of the stock-based awards outstanding at March 31, 2022.

Estimated future compensation expense will change to reflect future grants of restricted stock awards and units, future option grants, changes in the probability of performance thresholds being met, and adjustments for actual forfeitures.

(in millions)

Second quarter 2022 $ 64.0

Third quarter 2022 63.1

Fourth quarter 2022 54.3

6 unchanged sentences

No outstanding stock options had an anti-dilutive impact on the diluted earnings per common share calculation in the periods presented.

Three months ended Nine months ended

Three months ended

(in millions) 3/31/2022 3/31/2021

7 unchanged sentences

NOTE 9 – OTHER COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS.

The changes in each component of accumulated other comprehensive loss, including reclassification adjustments for the three months ended September 30, 2021 and 2020 are presented in the table below.

The changes in each component of accumulated other comprehensive loss, including reclassification adjustments for the three months ended March 31, 2022 and 2021 are presented in the table below.

Three months ended 3/31/2022 Three months ended 3/31/2021

6 unchanged sentences

.5 ( 5.6 ) ( 5.1 ) ( .8 ) ( 7.1 ) ( 7.9 )

Net deferred tax benefits (income taxes)

( .4 ) 1.2 .8 2.1 ( 3.1 ) ( 1.0 )

Other comprehensive income (loss)

3.1 ( 3.8 ) ( .7 ) .1 9.4 9.5

Balances at end of period $ ( 40.7 ) $ 11.3 $ ( 29.4 ) $ ( 54.3 ) $ 11.6 $ ( 42.7 )

The other comprehensive income (loss) in the table above excludes $( 12.2 ) million and $ 20.8 million of other comprehensive income related to redeemable non-controlling interests held in our consolidated products for the three months ended September 30, 2021 and 2020, respectively.

The changes in each component of accumulated other comprehensive loss, including reclassification adjustments for the nine months ended September 30, 2021 and 2020, are presented in the table below.

Nine months ended 9/30/2021 Nine months ended 9/30/2020

(in millions) Equity method investments Consolidated T.

Rowe Price investment products - variable interest entities Total currency translation adjustments Equity method investments

Consolidated T.

Rowe Price investment products - variable interest entities Total currency translation adjustments

Balances at beginning of period $ ( 43.6 ) $ 20.6 $ ( 23.0 ) $ ( 46.9 ) $ 3.9 $ ( 43.0 )

Other comprehensive income (loss) before reclassifications and income taxes 2.4 ( 9.8 ) ( 7.4 ) ( 9.4 ) 10.3 .9

Reclassification adjustments recognized in non-operating income

— ( 1.6 ) ( 1.6 ) — ( 2.6 ) ( 2.6 )

.5 ( 7.2 ) ( 6.7 ) ( .8 ) ( 9.7 ) ( 10.5 )

Net deferred tax benefits (income taxes)

( .1 ) 1.9 1.8 .5 2.5 3.0

Other comprehensive income (loss)

.4 ( 5.3 ) ( 4.9 ) ( .3 ) ( 7.2 ) ( 7.5 )

Balances at end of period $ ( 36.3 ) $ 4.9 $ ( 31.4 ) $ ( 43.9 ) $ 13.4 $ ( 30.5 )

The other comprehensive income (loss) in the table above excludes $ 20.2 million for the 2021 period and $ 13.9 million for the 2020 period of other comprehensive income (loss) related to redeemable non-controlling interests held in our consolidated products.

The other comprehensive income (loss) in the table above excludes losses of $ 9.9 million and income of $ 11.8 million of other comprehensive income related to redeemable non-controlling interests held in our consolidated products for the three months ended March 31, 2022 and 2021, respectively.

NOTE 10 – COMMITMENTS AND CONTINGENCIES.

Rowe Price has committed $ 499.1 million to fund OHA products over the next five years .

CONTINGENCIES.

On February 14, 2017, T.

7 unchanged sentences

The matter has been certified as a class action.

The parties have reached an agreement in principle for a settlement, which will be presented to the court for approval.

The parties reached a settlement agreement, and, on January 18, 2022, the Court provided preliminary approval of the proposed settlement and set a fairness hearing for May 24, 2022.

The proposed settlement would not be material to T.

2 unchanged sentences

In the opinion of management, after consultation with counsel, the likelihood of an adverse determination in one or more of these pending ordinary course of business claims that would have a material adverse effect on our financial position or results of operations is remote.

NOTE 11 - SUBSEQUENT EVENTS .

PENDING ACQUISITION OF OAK HILL ADVISORS, L.P.

On October 28, 2021, we entered into a definitive purchase agreement to acquire 100 % of the equity of Oak Hill Advisors, L.P.

(OHA), and certain other entities that have common ownership.

OHA is an alternative investment management firm with a focus on performing and distressed credit investments in North America, Europe and other geographies.

Under the purchase agreement, we will acquire OHA for a purchase price of up to $ 4.2 billion, with $ 3.3 billion payable at closing, approximately 74 % in cash and 26 % in T.

Rowe Price Group, Inc.

common stock, and up to an additional $ 900 million in cash upon the achievement of certain business milestones beginning in 2025.

The purchase price includes the retirement of OHA debt outstanding at closing.

The completion of the acquisition is subject to various approvals and other customary closing conditions and is expected to close in the fourth quarter of 2021.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

4 unchanged sentences

Rowe Price Group, Inc.

and subsidiaries (the “Company") as of September 30, 2021, the related condensed consolidated statements of income, comprehensive income, and stockholders’ equity for the three-month and nine-month periods ended September 30, 2021 and 2020, the related condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2021 and 2020, and the related notes (collectively, the consolidated interim financial information).

and subsidiaries (the “Company") as of March 31, 2022, the related condensed consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively, the consolidated interim financial information).

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S.

12 unchanged sentences

Baltimore, Maryland

October 28, 2021

April 28, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements